Contents
1.0 1
INTRODUCTION 1
1.1 BACKGROUND OF GERMANY 1
1.1.0 PEOPLE AND SOCIETY OF GERMANY 1
1.2 INTERNATIONAL TRADE STATUS OF GERMANY 2
2.0 INTERNTIONAL TRADING WITH OTHER COUNTRIES 3
2.1.0 GERMANY’S INTERNATIONAL RELATIONSHIP WITH FRANCE 5
3.0 Data collection and Analysis 6
3.1 Data collection 6
3.2 Analysis 7
3.2.1 IMPORT 7
3.2.2 EXPORT 8
3.2.3 REAL GDP 8
3.2.4 INFLATION 9
3.2.5 UNEMPLOYMENT 10
3.2.6 INTEREST RATE 10
3.2.7 EXCHANGE RATE 11
3.2.8 BALANCE OF PAYMENT 11
4.0 IMPORT AGAINST REAL GDP 12
4.1 IMPORT AGAINST CPI 12
4.2 IMPORT AGAINST UNEMPLOYMENT 13
4.3 IMPORT AGAINST INTEREST RATE 13
4.4 IMPORT AGAINST EXCHANGE RATE 14
4.5 IMPORT AGAINST B.O.P 14
4.6 EXPORT VS REAL GDP 15
4.7 EXPORT VS CPI 15
4.8 EXPORT VS UNEMPLOYMENT 16
4.9 EXPORT VS INTEREST RATE 16
4.10 EXPORT VS EXCHANGE RATE 16
4.11 EXPORT VS B.O.P 17
4.12 IMPORT VS OTHER FACTORS 18
4.13 EXPORT VS OTHER FACTORS 18
5.0 ISSUES AND CHALLENGES OF GERMANY 19
5.1 Exporting German Troubles 19
5.2 Industrial Competitiveness 19
5.3 Paying for Europe 20
6.0 RECOMMENDATION AND CONCLUSION 21
6.1 RECOMMENDATION 21
6.2 CONCLUSION 21
References 22

1.0 INTRODUCTION
1.1 BACKGROUND OF GERMANY

Germany which is otherwise called the federal republic of Germany which is additionally the parliamentary republic in the western-focal piece of Europe which comprises of 16 bodies electorate and which has held its predominance. Its capital is Berlin and its landmass covers a zone of 357,021 square kilometers and has a mild occasional atmosphere. Germany with in excess of 80.6 million tenants is the most crowded part state in the European Union and has the lion's share power regarding monetary and political. It is consequently adequate that Germany is the second most populated environ on the planet.
1.1.0 PEOPLE AND SOCIETY OF GERMANY
At present, the number of inhabitants in Germany is 82,652,256 and this is focused around the conception, passing and relocation rates and also the populace rate starting July 1 2014. The current populace then again, demonstrates a rate increment of 2.6% amid the year 2013, which indicates how Germany ceaseless to become quickly every day and which keeps on make it the sixteenth most populated country (Worldometers, 2014).
The official language of Germany is German with over half the population speaking that which covers 95% the other minority languages are Sorbian, Danish and Romani which is spoken by very few people from the North and West. Its ethnicity comprises of 91.5% of Germans, 2.4% Turkish and the other 6.1% which is made up of Greeks, Italians, Polish, Russians and Spanish. Religiously there are 34% Roman Catholic, Protestants which makes up of 34% too and the Muslims which aren’t much 3.7% and those who aren’t affiliated to any 28.3% (EW World Economy Team , 2013).
1.2 INTERNATIONAL TRADE STATUS OF GERMANY

Germany is the third largest exporter and importer in the world which includes Cars, Vehicle parts, Machinery, Packaged medicaments all these accounts for more than half of European Union’s international trade rate. Much of Germany's exports concentrates on mechanically delivered goods and services. Specifically German mechanical designing items, vehicles, and chemicals are exceptionally esteemed universally. Around one euro in four is earned from exports and more than each fifth employment depends specifically or by implication on remote exchange. Exports of goods and services likewise made up around 52 percent of its GDP. Fundamentally, EU coordination has extraordinarily strengthened intra-European exchange, with around 69 percent of German exports transported to European nations and 58.2 percent conveyed to part conditions of the EU. Inside the EU itself, Germany's most paramount exchanging accomplice keeps on being France (9.5 percent of aggregate exports). In the meantime 7.9 percent of German exports went to the US in 2012 and 6.6 percent to the UK.
The vast majority of the goods transported in to Germany began from the Netherlands. Germany foreign goods worth 86.6 billion euro from the Netherlands (9.5 percent of aggregate German imports), with China and France representing the following most astounding imports (Watch, 2013).
2.0 INTERNTIONAL TRADING WITH OTHER COUNTRIES Germany as one of the biggest international trading giants in the world makes it no difference that in other to make the best of their Gross domestic Product they may need to trade with other countries. Many countries therefore have good alliance with Germany because of its vast exports being it manufacturing cars, vehicle parts or even refined petroleum. Some of these countries are the European Union (58.2%), USA (7.0%), China (6.1%), and Switzerland (4.3%) these are for exports whereas for imports we have (54.8%) for European Union, (5.5%) for USA and (4.2%) for Switzerland etc. They all have mutual agreements with Germany to benefit from their products and in return also export what they have to Germany. When there is good relationship between countries the policy of liberalization is consistent with its strong international competitiveness demonstrated. As in other real trading countries, Germany's occupations, speculations, benefits and expectations for everyday comforts have been genuinely influenced by disturbances of world exchange and changes in the global economy.

2.1.0 GERMANY’S INTERNATIONAL RELATIONSHIP WITH FRANCE Germany and France have very good international trade relationship, this is due to the vast trading activities that take place between them. Germany offers the same political investments likewise an EU nation which implies there are no trade restrictions between the two nations. They likewise impart a comparable budgetary circumstance and Germany is geologically near France. France is the second biggest exchanging country in Europe just second to Germany. Exchanging between the two nations comprises of generally apparatus, for example, Cars, Aircrafts, Iron and Steel and Chemicals, and additionally rural products, for example, nourishment, milk, and horticultural assets. Trade patterns between Germany and France show that each country is trading dependably with the countries comparative advantage and disadvantage production. France trades agronomic products (low technology) to Germany whereas Germany trades high technology goods due to its (low agricultural goods). Both countries can experience production beyond their possibility frontier because they can each focus on producing and trading their most efficient products.

3.0 Data collection and Analysis
3.1 Data collection

Data collection has to be accurate and reliable, which will give relevant and correct answer by analyzing the collected data. The sources use hereby collected from World Bank and European Central Bank which has the information about Real GDP, unemployment, exchange rate, import and export, CPI, B.O.P. and interest rate in percentage. The observation will be made from 1980 to 2014. 3.2 Analysis

This part of the work will analyze the collected data from the given years, as well as make comparisons of each data with import and export.

3.2.1 IMPORT From 1980 to 2013, Germany’s import increased by 20% since the time. Nonetheless, importation was constant during 1980 to 1999. Though, imports gradually improved since early 2000 until 2013.
Most of the products and services’ imported from the Netherlands, which worth of 9.5 percent of total German imports in 2012. At the same year, Germany imports were at the pick of all time between 1980 and 2013, the country spends in total of 86.6 billion euro on import. The highest imports made with Netherland, China and France. The economists said import is growing because of the customer demand and the high investment of companies, as well as the weather. However if the imports made more on machinery and equipment, it will help the production of the country in a long run. The studies shows Germany imports will be increased by 4% in 2015 (EW World Economy Team , 2013).
3.2.2 EXPORT This graphic shows the increase in export sector. During more than 33 years, German export risen by 30%. In 2013, whereas the graphic shown the highest of all time in export history. The export graphic is shown similar as the imports graphic and it is increased continuously until 2013. Moreover, when the country is experiencing the increase in export it is good for the country’s economy because it gains more from trade to the surplus of trade which mean the country’s economy is stable hence the Germany economy to 2013. In 2012, the economists forecasted the decline in imports by 0.5%, whatsoever it was higher than they forecasted and declined by 1.3%. The economists predicted to increase the exports of goods and service by 2.4% in 2015 (Euronews, 2014).
3.2.3 REAL GDP There is a shortfall in 1982, 1993 and between 2009 and 2010. The greatest deficit is shown during 2009, dropped by 7%. However, it started spike up in mid of 2010 and continuously dropping 3 years since then.
Germany is the fifth largest economy in the world and largest in European countries. Germany is a very diverse country in terms of domestic demand and social security. Nevertheless, during 2007 to 2009 GDP dropped by 7% which we can relate to how they spend the money (EW World Economy Team , 2013).
3.2.4 INFLATION This inflation graphic is from 1992 to 2013. The highest inflation was in 1992 and the lowest was 0.3% in mid of 2009 which is associated with the recession which encountered the world starting in the USA in 2008. Since the 1992s, CPI is making inconsistently undulating changes from 1996 to 2013 (Taborda, 2014). As they said, falling in inflation rate resulted to decrease in car fuels by 3.4%, heating oil 6% and other products and services including tea and coffee, electronics, also telecommunications cost lowered in following 3 years. (DW, 2014)
3.2.5 UNEMPLOYMENT Germany unemployment graphic shows unemployment rate reached the peak of 11 percent during 2004 till 2006. Nevertheless, the unemployment rate continuously decreased from 2006 to 2013 which signifies that the welfare of people in Germany is relatively better in relation to many countries on earth (Taborda, 2014).
During the global financial crisis in 2005. The reason rising demand for labor was the government incentive program which they called short work program to bring down the unemployment rate in the nation (Hunker, 2010).
3.2.6 INTEREST RATE During the year of 1980 to 2002, there is a surplus increase started from 1990 till 2002, which the interest rate reached up to 7.2 percent. However the rate fallen down continuously from 2009 to 2013.
Between 1995 and 1997, interest rate peaked at highest of 7.2% because of high inflation rate.
3.2.7 EXCHANGE RATE This chart indicates exchange rates from 1999 to 2014. Exchange rate is almost stabled since 2004 until now, only slightly changes between cents. Also it is shown the exchange rate decreased during 1999 to 2000 and rose since then. However, the rising of exchange rate tends to discourages exports it is for this reason Germany have been one of the countries in the European Union which promotes the continuation of the European Union and the use of Euros since it makes Germany products more competitive with favorable exchanges under the umbrella of Euro currency.
3.2.8 BALANCE OF PAYMENT There is an increase of Balance of payment in early1980s till 1989, although there is deficit for first 2 years. The country started had a drop of BOP in 1990 and had deficit during the period of 1991-2000. It spiked up again and had surplus since then.
4.0 IMPORT AGAINST REAL GDP This graph is comparing the country’s imports to GDP between 1980 and 2013. Imported goods and services can affect the particular country’s GDP when imports are higher than exports, but it is only from an accounting sense. Nonetheless, in this case imports cannot be solely influenced in GDP’s fallen status in 2009. However, it does not form in GDP.

4.1 IMPORT AGAINST CPI

This graph shows the import and inflation rate comparison. Higher the imports favorable for inflation, because when there is a high competition on imports goods and services they will decrease the prices which will give more purchasing power and this graph is the example of the reality (Pettinger, 2014).
4.2 IMPORT AGAINST UNEMPLOYMENT In 1991, imports went down by 1% at the same time unemployment increased by 3% until 1998. This happened again during the year 2002 until 2005. The reason unemployment decreased could be labor imports to other countries. For example, importing financial sector employees to United Kingdom and other European countries (Davidmann, 1996).

4.3 IMPORT AGAINST INTEREST RATE Higher the interest rate there will be lower imports. However higher currency interest rate will attract more investors and speculators to the country. Nevertheless, in Germany’s historical graphic shows the decrease in interest rate and increase in imports during 2008 to 2013, which could be explained due to the 2008-2009 global credit crisis.

4.4 IMPORT AGAINST EXCHANGE RATE

4.5 IMPORT AGAINST B.O.P The country’s balance of payment compound from three accounts, which the current account will be affect by import, but only when imports balance is more the export will be minus in current account of balance of payment. The decrease in B.O.P during 90s might be some other factors influence in other accounts.
4.6 EXPORT VS REAL GDP

The German economy has improved markedly in recent years. The economy took a serious hit during the economic crisis. Because of the country’s strong export dependency, GDP declined by more than 5 percent in 2009. However, the V-shaped recovery was equally strong, as pre-crisis real GDP was reached again in the second quarter of 2011. The German government expects real GDP to grow by 1.8% in 2014 and by 2.0% in 2015.

4.7 EXPORT VS CPI The county’s productivity is higher and export are increasing year by year which affect to the lower price to the products and decrease in inflation.
4.8 EXPORT VS UNEMPLOYMENT When a country has higher exports and productivity which creates more jobs for people. Germany could be an example for many how they reduced high unemployment by increasing international trade.

4.9 EXPORT VS INTEREST RATE The high rate of interest could be influence the country’s exports to increase in along run during 1980 to 1994, which might be slowed the export rate to increase. However, started from 1995 export rate slowly moved up and during the while interest rate went down dramatically. As it mentioned before, export rate might be increased by 2.4 in 2015.

4.10 EXPORT VS EXCHANGE RATE

Exchange rate tends to encourage export if it is competitive in relation to other countries, the exchange rate of Germany is determined by the competitiveness of Euro currency which have always stayed competitive hence encouraging the export of Germany produce not only to France but also to other countries in the world.

4.11 EXPORT VS B.O.P The country’s exports increased last 34 years, which can be a good influence on B.O.P’s positive increase during the same time. Germany export rate shows the country’s efficient productivity and positive future in a long run. And since the balance of payment is surplus it therefore means Germany is placed at stable economy on international basis, however in the 1990’s the countries BOP tended to be at deficit though later under government efforts the BOP was managed to increase while reducing the level of deficit and by mid of 2003 it managed to balance and afterwards BOP consistently continued to be at surplus.
4.12 IMPORT VS OTHER FACTORS

Comparing import to other factors like CPI, unemployment rate, interest rate, exchange rate, Real GDP and BOP is favoring the economy of Germany as it can be seen on the graph above that that upon the effective management of all these other factors import is not leading into deficits on all factors measured.
4.13 EXPORT VS OTHER FACTORS

5.0 ISSUES AND CHALLENGES OF GERMANY
5.1 Exporting German Troubles
German financial quality depends on its fare ability. The suspicion is that the nation can de-couple from the Euro-Zone, expanding its concentrate on developing markets. Yet German fares to European nations add up to around 69% of the aggregate, including 57% to the part conditions of the European Union. In 2012, Germany ran an exchange deficiency of Euro 27 billion with Russia, Libya, and Norway, fundamentally for vitality imports. Germany likewise had exchange shortfalls with Japan (Euro 4.7 billion) and China (Euro 11.1 billion). Conversely, Germany had an exchange surplus with the Euro-Zone (France, Italy, Spain, Greece, Portugal, Cyprus and Ireland) of Euro 54.6 billion. It additionally had a surplus with the US (Euro 36.2 billion) and UK (Euro 29.3 billion) (Das, 2013).
Essentially, Germany's general worldwide exchange surpluses are dependent on fares to the Euro-Zone. Proceeded with shortcoming in these harried nations will influence Germany's financial prospects. German trade execution likewise relies on upon the estimation of the Euro. In the event that the euro keeps on rising due the US proceeding with its quantitative facilitating arrangement for more than anticipated, then Germany's aggressive position will debilitate. High vitality costs and the expanding issues in developing markets will worsen its issues. A lull in German fares will have auxiliary impacts. The recuperation in economies like Spain is reliant on sending out moderate merchandise to Germany which are then re-traded as a feature of completed items. Decrease in German fares will diminish financial action in these nations, thus decreasing interest for German trades inside Europe.
5.2 Industrial Competitiveness
German industrial competitiveness is also overstated. Between 2000 and 2010, German productivity increased by a modest 0.6% per annum, roughly half the OECD average. Despite reforms which resulted in German real disposable income only increasing by around 50% of increases in France since 1997, the labor market remains inflexible.
The German banking system remains fragmented and weak. The problems of the State owned Landis banks are well documented.
Germany’s infrastructure is aging, requiring investment. Energy costs remain high, some 30% above that of the rest of Europe and double that of the US, reducing competitiveness. High natural gas costs (four times the US cost) disadvantages its petro-chemical industry (Das, 2014).
OECD and World Economic Forum studies rank Germany modestly in terms of education, communication infrastructure, financial system soundness and business environment. It ranks 106th for starting a firm, 31 for mobile broadband, 75 for soundness of banks, 127 for hiring and firing and 139 for wage flexibility.
Germany demographics, with an aging population, compound its problems. It has the highest median age at 45 years. In Europe in 1970, Germany’s dependency ratio (number of workers for each retiree) was 4.1. In 2010, it was 3.0 and is projected to go to 1.6 by 2050, only slightly higher than Japan (Evans-Pritchard, 2013).
5.3 Paying for Europe
The need to back weaker nations may expand German issues. Governments in the at-danger economies are unrealistic to meet concurred plan deficiency or obligation level targets. Banks will face climbing awful obligation misfortunes and oblige capital imbuements. For both grieved sovereigns and banks, access to money related markets will stay confined. Expense of business financing will stay above reasonable levels. Further financing support may be needed. Euro-Zone parts, including Germany, stay focused on maintaining a strategic distance from the obscure dangers of a default and takeoff of nations from the Euro. This apparently implies that aid will be imminent, despite the fact that the precise structure and joined conditions stays questionable. Fringe nations will be compelled to depend on the European Stability Mechanism (ESM) and European Central Bank (ECB) to give financing. Unless the span of the ESM is expanded, the ECB will be compelled to give financing straightforwardly or in a roundabout way, subsidizing banks to buy government bonds which will be utilized as guarantee for the national bank credit.
6.0 RECOMMENDATION AND CONCLUSION
6.1 RECOMMENDATION
Germany as a country is doing well but if the Euro rises there may be problems for the country, they need to find alternative measures to suppress these challenges and keep the country safe. Germany is experiencing macroeconomic imbalances, which require monitoring and policy action. The size and persistence of the current account surplus deserve close attention. Also if they continue to maintain a sound fiscal position they will do well and be fine.
To invigorate residential wellsprings of development and build potential development, Germany needs to improve the development neighborliness of its open funds and the proficiency of tax system, raise work supply and human capital, manage the difficulties postured by the change of the energy system (Energiewende), raise venture and profit, and diminish boundaries to rivalry, especially in the administrations, railway and banking regions.
6.2 CONCLUSION

In conclusion, from the studies we can see the Germany’s economy is healthier than many other countries. Nevertheless, there is no such perfect trade in any country, but it is the way to develop whole nation.

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